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Commodities Energy

Oil and natural gas daily review (August 14, 2014)

August 14, 2014, Thursday, 07:04 GMT | 02:04 EST | 10:34 IST | 13:04 SGT
Contributed by Angel Broking


Crude Oil

Oil prices gained on both sides of the Atlantic in choppy trading on Wednesday, recovering from a 13-month low as turmoil in Iraq and Libya kept concerns about potential supply disruptions in focus. However, WTI oil prices pared gains after the U.S. Energy Information Administration (EIA) reported crude oil inventories rose 1.4 million barrels last week, against expectations stocks would be lower.

Exports from Libya are recovering despite the recent unrest, with the first leaving the port of Ras Lanuf on Tuesday after a year-long harbor blockade. Unrest in Iraq has yet to disrupt significant amounts of oil, though some small fields have been shut in the autonomous Kurdish region. The United States has sent around 130 additional military personnel to Iraq as Washington seeks to help Baghdad contain the threat posed by militants.

On the production front, OPEC output rose to a five-month high above 30 million barrels per day (bpd) in July and U.S. crude production averaged an estimated 8.5 million bpd, according to reports from the International Energy Agency and the EIA.

On the MCX, crude prices declined by around 0.5 percent and closed at Rs.5950/bbl.

EIA inventory update

The EIA released its weekly inventories report last night and US crude oil inventories rose by 1.4 million barrels for the week ending on 8th Aug2014. Gasoline stocks declined by 1.2 million barrels, whereas distillate inventories fell by 2.4 million barrels for the same time period.


Outlook

On an intraday basis, we expect crude prices to trade lower on ample supplies in the US and OPEC nations. Exports from Libya have also been smooth despite the violence while crude exports from Iraq have not been disturbed by the tensions in the region.

On the MCX, crude prices are expected to trade on a weak note taking cues from weak international markets.

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